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Zero Tolerance

Discussion in 'Lawn Mowing' started by tiedeman, Feb 4, 2006.

  1. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    I posted the "Reached the Point" thread about customers paying late and I wasn't going to accept it anymore, but I am curious.

    How many people actually follow a strict zero tolerance for late payers, and stop service all together until the invoice is paid in full?

    Be honest now, do you actually follow it, or let the customers slid a couple of days. I am just at the point where I am thinking about it doing. Sure, it's usually only about 6 to 8 customers that do it, but I have bills to pay too.
     
  2. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    nobody here has a "zero tolerance" policy. that's a fact. i have, and have had, as close to a "zero tolerance" policy, as a lawnboy can get. this year, however, my new contracts have a true "zero tolerance" policy. i'll let u know how it turns out. as far as my previous very close to "0" tolerance policy, well, fact is, if you enforce it, you lose clients. WHY? cus the rest of the pee on lawnboy community, have no policy whatsoever
     
  3. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    that is my biggest fear. About losing the customers. Is it worth it lose the customers or receive money from them a 1 to 2 weeks later?

    I know that they will find someone else out there that lets them slid, but why are we so forgiving compared to other businesses. Like someone stated early about an electrican or plumber. They usually get paid right then and there. Why shouldn't we?
     
  4. afftandem

    afftandem LawnSite Member
    Posts: 196

    Sit down and figure up what % of ur customers are chronic late payers.

    If its a high percentage (20+%)... then dont sweat it. Its too much of ur business to disregard... Chaulk it up to human nature (which it is). Just as long as ur eventually getting paid.

    Dont figure the guy who pays good, but on the rarest occasion is late (that happens)

    If its just a small handful that u could easily replace w/ a little advertising, then get rid of them... U seem to be really worked up over this.

    Also, assuming u dont already do this... add in late fees for those who pay late. i.e. a 10% penalty over the monthly cost like other companys.. may want to check if there are any laws on how much u can charge as a late fee.

    Your Bill: $100
    If paid after the 1st: $110

    Maybe that'll help.
     
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    LOOK, fact is fact, i said it a million times, - LAWNBOYS ARE NOT BUSINESSMEN!" cutting grass, and EXTENDING CREDIT, are 2 different types of businesses. one, is in business to cut grass, for a fee, and the other, is in business, to extend credit, for a fee. HOW CAN both, be one in the same? you'll lose business tied, becuase most lawnbvoys are willing to work for less than minimum wage. in fact, most lawnboys, LIKE MOST LOWER CLASS folk, are just plain UNEMPLOYABLE, and take to the mower, just to eat.
     
  6. out4now

    out4now LawnSite Bronze Member
    from AZ
    Posts: 1,796

    Well you sort of answered your own question there. Its because like you and Mr. Gedd pointed out there's an endless supply out there willing to let them slide so its really a trade off. If you end it, you have to spend more time and money looking for new work so does the cost of that really offset the cost of keeping them if they pay a few days late? Unification in this industry will never happen, so it makes it difficult to get any leverage. If you're at the point of turning away work then a few customers is not a big deal but if you really need them then it will hurt more. How long do you think they's wait on their paychecks at work though. Start tacking on late fees like returned check fees and see if they pay it while you're out shopping for new clients.
     
  7. Lux Lawn

    Lux Lawn LawnSite Silver Member
    Posts: 2,267

    I agree you will lose customers.I have some that I let slide and I know that I shouldn't but they are the accounts you don't want to lose.The people that are always late you charge them your late fee every month,if they drop you who cares.
     
  8. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    the whole situation with late fees of what I have run across is this: You charge them a late fee, but when they pay the bill they leave the late fee off of the payment. They feel that they should not have to pay it. So what happens when they don't pay the late fee? What do you do then?

    It just seems like it is an endless circle where the customer always wins, whether you are charging them a late fee and they don't pay it or they pay their bills late
     
  9. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    But my question is Larry, shouldn't we care, shouldn't we start to really tighten up he chain on these customers?

    To me it seems that the customers took advantage of me. It's kind of a no win situation. The only way that I could win is by really dropping the customer, or stopping service until paid in full, and finding a customer that will pay on time

    Another thing to think about, what happens if you stop service. Then they pay, and you have an overgrown lawn. Sure the contract might say that the charge them is perhaps double because of the over growth, but do you really think that the customer will pay double the charge for just one cutting?
     
  10. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    it's a LATE FEE. not a LATE OPTION. if u recieve the check, without the late fee, then you should treat it as an unpaid account. afterall, it wasnt paid in full, if the late fee wasn't paid. then, your suspension/collection policy should kick in. it's all a matter of having policies, and sticking to them
     

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